General government cash primary surplus at €1,375m in 2M’13

MoF data show that general government (gg) primary cash balance recorded a surplus of €1,375m in 2M ’13 from €3,206m in 2M’12 down 57.1% y-o-y. According to MoF, reported figure is on a non consolidated basis and consolidated primary balance is expected to be smaller by €825m. Furthermore, general government cash surplus narrowed to €72m in 2M ’13 from €2,295m last year. It is also noteworthy that MoF repeated 2012 gg deficit (ESA95) stood at €12,512m or 6.4% of GDP.

Current period data incorporate:

  • State budget deficit of €1,007m in 2M’13 from surplus of €597m last year with primary surplus shrinking to €268m in 2M’13 from €1,459m in 2M’12.
  • Extrabudgetary funds’ (i.e. legal entities) deficit of €209m in 2M’13 from surplus of €126m in the corresponding period last year.
  • Local governments’ surplus of €424m, down 6.4% y-o-y.
  • Social security funds’ surplus of €865m, down 22.8% from last year’s surplus of €1,120m.

Released data imply a m-o-m deterioration of general government balance, which recorded a deficit of €1,453m in February from surplus of €1,525m in January. Furthermore, primary balance also turned negative in February showing a deficit of €409m from surplus of €1,784m in January.

February bottom-line (deficit of €1,453m) primarily reflects a negative contribution (i.e. deficit) from state budget (€1,620m) and – to a lesser extent – extrabudgetary funds’ (€251m) more than offsetting social security funds and local governments’ surpluses of €306m and €111m respectively.

MoF also disclosed the general government arrears (> 90 days), including tax refunds, which rose by €119m or 1.4% m-o-m and eased by €68m or 0.8% y-t-d to €8,795m at the end of February, from €8,676m at the end of January and €8,863m at the end of December. It is reminded that arrears had peaked to €9,545m in October easing thereafter until January ‘13.

The bulk of general government arrears stems from social security funds (€4.29bn – 49% of total) and hospitals (€2.01bn – 23%), while local authorities’ arrears stand at €0.96bn (10.9%), state budget arrears at €0.54bn (6.1%), tax refunds at €0.66bn (7.5%) and other legal entities’ arrears at €0.33bn (3.7%).

It is pointed out that MoF has recently stated that state arrears to the private sector of €1.5bn had been paid over the December – March period, of which €0.73bn had been paid in December – February and €0.79bn in March. According to MoF, requests for the payments of additional €1.7bn arrears have been completed.

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